Whether you’re looking to consolidate debt, finance a big purchase, or make home renovations, a personal loan could be the right tool to help you get there.
Get started with our list of the best personal loans of 2021. Reviews include credit score requirements, available terms, loan amounts and annual percentage rate.
Our Top Picks for the Best Personal Loans
LightStream – Best Variety of Loan Options
Credible – Best Marketplace
SoFi – Best Online Lender
Upstart – Best Peer-to-Peer Lender
PenFed – Best Credit Union
U.S. Bank – Best Bank
Best Personal Loans Reviews
*Advertised APRs and credit scores are valid as of April 2021. For more details, visit each personal loan lender’s website.
Pros
Online application
Autopay discount
Better rate guarantee
No origination fees
No prepayment penalties
Cons
Qualifying applicants need good or excellent credit
No pre-approvals
Term Lengths
24 to 144 months
Loan amounts
$5,000 – $100,000
APR*
2.49% – 19.99%
Minimum credit score required*
700+
LightStream, a subsidiary of SunTrust Bank (now Trust), has a wide range of loan options and some of the longest terms available in the market. You can take out a personal loan for home improvements, medical bills, vacations, big purchases, K-12 education, recreational vehicles, family planning, and even horses for those in the equine industry.
Lightstream’s starting APR is 3% lower than the industry average. Borrowers benefit from an additional 0.50% APR discount if they sign up for AutoPay, and a 0.10% discount may apply as well if they get a lower APR offer from a competing lender.
LightStream ranked top in J.D. Power’s 2020 U.S. Consumer Lending Satisfaction Study. As a customer satisfaction guarantee, LightStream will pay you $100 if you’re not satisfied with your experience after closing the loan.
Pros
Free marketplace and comparison service
Access to pre-qualification and quotes from multiple lenders
Best rate guarantee
Cons
Not a loan servicer
Term Lengths
12 to 84 months
Loan Amounts
$600 – $100,000
APR*
2.49% – 35.99%
Minimum Credit Score Required*
Depends on lender
Credible’s free lending platform lets you compare quotes from multiple lenders in as little as two minutes — without making a dent in your credit score. They feature an excellent network of lenders, like SoFi, Lightstream, PenFed and others.
Using this marketplace can save you time and money by narrowing your choices by location, loan amount, desired APR and loan purpose.
If you find and close a personal loan with the lowest rate on a competing website within eight days of applying at Credible, the company will give you $200.
The company welcomes applicants with both good and poor credit, but applicants with excellent credit histories tend to see more loan offers, more flexible repayment terms and lower interest rates.
NOTE: Since Credible doesn’t service its loans, the numbers listed above are subject to your location and the lenders’ offers.
Pros
Online loan application
No origination fee
No prepayment penalty
No late fee
0.25% AutoPay discount
Option to add co-borrower
Cons
Qualifying applicants need good credit
Disbursement of funds can take a few business days
Term Lengths
24 to 84 months
Loan Amounts
$5,000 – $100,000
APR*
4.99% – 20.25% (with AutoPay)
Minimum Credit Score Required*
680
Initially a student loan lender, SoFi now offers personal loans up to $100,000, one of the highest loan limits on the list. It is also one of the first lenders to offer up to 1% of the total loan amount in crypto perks.
You’d need a good credit score to qualify, but there’s a lot to like about SoFi personal loans. Unlike many other lenders, SoFi considers alternative credit data — like free cash flow, professional history and financial responsibility history — while still offering competitive interest rates.
With pre-approval, you can check your rate before applying without hurting your credit score. The application process is entirely online and can be completed in a matter of minutes.
SoFi also offers unemployment protection if you lose your job, temporarily suspending your monthly payments for up to 12 months and providing you with free tools, like career coaching and financial advice, to help you get back on track.
Pros
Accepts applicants with fair credit
Accepts applicants with short credit history
Considers alternative data
No prepayment penalty
Cons
High personal loan interest rates
Charges origination fee
Charges a late payment fee
Term Lengths
36 and 60 months
Loan Amounts
$1,000 – $50,000
APR*
5.31% – 35.99%
Minimum Credit Score Required*
620
Upstart’s peer-to-peer model is simple: instead of getting the money from a traditional financial institution, you get it from investors. Upstart’s alternative loan application model considers job history, highest level of education you’veachieved andr area of study to determine eligibility.
Upstart is the only peer-to-peer lender that accepts applicants with a fair credit score (620) and short credit histories. Even unemployed individuals may apply as long as they have an employment offer with a starting date that isn’t more than 60 days away from the date of application.
You can check your rate before applying, and loan funds can be disbursed as early as the next business day after you close on the loan.
Pros
Nationwide branches
Flexible repayment terms
No prepayment penalties or origination fees
Cons
Membership fee
Term Lengths
6 to 60 months
Loan Amounts
$500 – $20,000
APR*
6.49% – 17.99%
Minimum Credit Score Required*
Not disclosed
PenFed is our top credit union for personal loans because of its flexible repayment terms, low loan amounts and the absence of loan origination or prepayment penalties.
They offer a lower APR range than other credit unions, and candidates can apply individually or with a co-borrower. Non-members can apply for a personal loan and only need to join if they choose to accept the loan offer.
Membership was previously limited to the military, certain government agencies, and residents of eligible locations, but as of 2019, PenFed makes it easy for others to join. All you have to do is select “None of the above” in the membership application’s eligibility section and open a savings account with the required $5 membership fee.
Lastly, PenFed members can benefit from its Financial Hardship Center, dedicated to helping borrowers who may be in a tight financial spot.
Pros
Competitive APR rate
No origination fees or prepayment penalty
Fast funding
Online loan application
Cons
Must already have a bank account with U.S. Bank
Term Lengths
12 to 60 months
Loan Amounts
$1,000 – $50,000
APR*
5.99% – 18.49%
Minimum Credit Score Required*
660
U.S. Bank has a starting APR that directly competes with the best loan rates in the industry. Its maximum personal loan APR caps out at 16.49%, much lower than those of other big banks like Citi and Wells Fargo, which cap their APRs at around 24%.
U.S. Bank also has an emergency Simple Loan available for minor, short-term expenses with a minimum loan amount that starts at $100 and goes up to $1,000. While the Simple Loan has a $6 monthly fee for every $100 you borrow, it’s an excellent alternative if you need a smaller amount quickly and want to avoid payday loans.
We also liked U.S. Bank’s open-ended loan purpose policy. That means they don’t restrict personal loans by purpose.
However, if you’re not already a U.S. Bank customer, you will be subject to stricter credit score requirements and may only borrow up to $25,000.
Other personal loans we considered
Marcus by Goldman Sachs Personal Loans
ProsNo service feesCustomizable due datesOne-time deferral bonus for consecutive, on-time payments0.25% APR AutoPay discountHighly ranked in J.D. Power’s 2020 U.S Consumer Lending Satisfaction Study
ConsNo cosigners or co-borrowers
Marcus by Goldman Sachs specializes in debt consolidation loans and has many worthy features like no service fees and customizable due dates. However, they don’t allow cosigners or co-borrowers so they didn’t make our main list.
Best Egg Personal Loans
ProsFast online loan approvalMinimum credit score of 600 – 700 for best ratesFunding in as little as one business day
ConsOrigination fees vary from 0.99% to 5.99%$50,000 loan maximum across multiple loans
Best Egg also specializes in debt consolidation loans and features quick one-day funding and online approval. However, customers may only have a maximum balance of $50,000 across multiple loans and origination fees are fairly high.
Prosper Personal Loans
ProsAccepts lower than average credit scoresNo prepayment feesPre-approval available
ConsAlternative credit data not consideredA high number of complaints registered against it with the (CFPB)
Prosper is a peer-to-peer lending marketplace offering loans funded by other individuals and investors. The high number of complaints lodged against the company with the Consumer Financial Protection Bureau (CFPB) knocked it off our main list.
LendingClub Personal Loans
ProsPre-approval availableNo prepayment feeOption to apply with a cosigner
ConsLoan amounts up to $40,0003% – 6% origination fee
LendingClub is yet another peer-to-peer lending marketplace. We didn’t include it on our list because of its high origination fees and low maximum loan amount.
USAA Personal Loans
ProsVariety of personal loan optionsFew CFPB complaints
ConsLimited membership: active duty or retired U.S. military, or qualifying family membersNo data available on loan terms, amounts, APRs or fees
USAA services loans only for active duty or retired military members and their relatives. Since only members of the armed forces may have access to loan details, we can’t review this company.
LendingTree Personal Loans
ProsReputable lender options: Marcus, LightStream, SoFi, OneMain Financial and othersOnline tools: credit and debit analyzers, calculators and FAQ’s
ConsHigher number of CFPB complaints than other marketplacesMaximum loan amounts and credit score requirements are not as competitive
LendingTree is a loan marketplace where borrowers can compare rates from multiple high-rated lenders. Unfortunately, a high number of CFPB complaints have been lodged against LendingTree, which disqualified it from our main list.
Wells Fargo Personal Loans
ProsLower minimum APR than similar banksFair credit scores acceptedExtensive online toolsOver 8,000 physical branches
ConsHigh number of complaints with the CFPB when compared to similar lenders
Wells Fargo is one of the largest and oldest banks in America. The high number of complaints registered against it with the CFPB disqualified it from our list.
Avant Personal Loans
ProsLenient underwritingFair credit scores accepted
ConsHigh loan origination feesAdministration feesAPR range from 9.95% to 35.99%
Avant uses a proprietary algorithm to determine borrowers’ creditworthiness, and its underwriting is more lenient and lower credit scores are accepted when compared to other lenders. However, it charges high origination and administrative fees and has less competitive rates, which kept Avant out of our main list.
Discover Personal Loans
ProsNo prepayment penalty3-, 5- and 7-year repayment term optionsNext-day fund disbursement
Cons$39 late payment fee$25,000 minimum household income requiredNo cosigner option
Credit card issuer Discover also originates loans, but it was its minimum income requirement and the fact that it doesn’t allow cosigners on loans that disqualified it from our main list.
Personal Loans Guide
Personal loans are one of the most convenient ways available for people who need cash for emergencies. However, there are some things you need to consider before taking out that personal loan. Read on to find out more.
Things to consider before applying for a personal loan
Loan purpose
A loan’s purpose can directly affect its APR. For instance, the APR for loans meant to pay off high-interest credit card debt or medical expenses will most likely be 2% to 3% lower than the APR for a personal loan meant for vacation expenses.
You might even benefit from another loan type entirely. If your purpose is to make home improvements, there are home improvement loans such as home equity loans or HELOCs that can help you cover a home repair.
If your loan purpose is to buy a used car, you’re better off applying for an auto loan. However, most auto lenders won’t finance a car once it reaches a specific mileage or age, so people buying older cars will often turn to personal loans.
Your credit
To improve your eligibility, you must have a credit score of at least 660 – the minimum credit score required by most lenders. The most commonly used credit scoring systems are FICO and VantageScore.
Your credit profile also plays into your personal loan, since it tells lenders how responsibly you meet your debt responsibility. Keep in mind that every time a bank does a formal credit inquiry, your credit score decreases temporarily.
You can request a free credit report from all three credit bureaus — Experian, TransUnion, and Equifax — by visiting AnnualCreditReport.com. Typically, you have the right to one free copy every 12 months, but due to COVID-19, you can request free weekly credit reports from all three bureaus until April 2022.
Your debt load
The debt-to-income ratio (DTI) is the sum of your monthly debt payments divided by your monthly gross income. This is a deciding factor for lenders, as it determines your ability to repay the loan.
If your DTI is on the high side, consider paying off some debt before you apply. Most lenders allow a maximum DTI of 43% for personal loans, although some may allow DTIs as high as 47%, depending on your annual income and other factors.
Annual percentage rate
The APR includes the interest rate plus other lender fees. This figure represents the loan’s actual cost, which is why you should always compare APRs rather than their interest rates to determine which lender is offering you the best deal. Personal loans have higher APRs than some secured loans.
Loan term
Personal loans usually have shorter repayment terms than other types of loans, often between 12 and 60 months, or one to five years.
Longer terms directly correlate with a lower monthly loan payment, but you’ll end up paying more interest over the life of the loan. A shorter term will raise your monthly payment, but you will save on interest over time.
Fees and penalties
Lenders usually charge origination fees and missed or late missed payment fees, along with prepayment penalties.
It’s worth noting that online lenders have lower overhead costs than traditional banks and credit unions and they tend to waive most, if not all, of these charges.
Alternatives to personal loans
Personal loans aren’t the only alternative available for managing high-interest debt, covering emergency expenses, or consolidating credit cards.
If you need cash to do repairs or remodel your home, you might be interested in home improvement loans, which are secured by your home and tend to feature lower interest rates than personal loans.
Other alternatives to personal loans include:
Pros
Cons
Credit card
• Transfer the balance from a high-interest card to a card with 0% promotional APR
• Most promos give you 12–18 months of no interest
• Once the promotional APR ends, the card may have a very high interest rate, leaving you where you started
Personal line of credit
• Lower APR than credit cards on average
• Borrow against it when you need cash
• Great credit needed to qualify
• Some lenders charge a fee for keeping the line active
Home equity loan
• Borrow against your home’s equity
• Lower APR than personal loans
• Higher loan limit
• You pay closing costs
• The loan is secured by your house, so failure to pay could mean you lose the property
Cash-out refinance
• Borrow excess to refinance your home and keep the difference
• Get a lower APR on your mortgage
• Must pay closing costs
• The mortgage is secured by your house so you could lose it if you default on the loan
401k loan
• Borrow against your own retirement funds
• Pay interest to yourself
• Not all employers offer this option
• The amount you borrow is taxed twice
Payday lenders secure their money by demanding a postdated check or direct access to your checking account to withdraw the funds by your next paycheck.Failing to settle either of these loans in time traps borrowers in an endless debt cycle, where they have to renew or roll the loan over to a further date, stacking up higher interest rates and fees.
Title loans lenders use your vehicle title as collateral, so they can repossess and resell your car or motorcycle if you don’t pay it back in time.
We do not advise these loans and stress that you consider alternative options. If you are limited by bad credit, credit cards and personal loans are designed specifically for that. If it is a time-sensitive issue, many reputable online lenders guarantee fast funding, with same-day or next business day disbursement.
Best Personal Loans FAQ
How to get a personal loan?
To get a personal loan, you must be 18 years or older and a U.S. citizen – some lenders accept permanent residents. Lenders will ask for proof of identity, proof of income, proof of stable residence and credit history. Bad credit will significantly limit your options, so take the time to correct any items in your credit report that may be affecting your score. Shop around and if you prequalify for a personal loan before submitting a formal application.
What is a personal loan?
Personal loans are a type of unsecured installment debt. They don’t require collateral (like secure debt), feature shorter repayment terms and fixed interest rates. Unlike other types of loans, personal loans can be used for any purpose. Common uses for personal loans are debt consolidation, home improvement projects, medical expenses and financing big purchases, events or vacations.
What factors do lenders consider for personal loans?
Most lenders look at traditional credit data – credit score, credit report, statements of assets, debt-to-income ratio and annual income. Other lenders consider alternative credit data, which includes your employment and education history, utility and rent payment history, and information available in public records.
Can you use a personal loan for anything?
Taking out a loan on behalf of someone else or using it for any form of gambling — including investing — is a complete no-go with any type of personal loan. Some lenders restrict loans a bit more than others and prohibit using funds for refinancing existing debt, paying for college or contributing to retirement plans, among others.
Should I apply for a personal loan or a balance transfer card to consolidate credit card debt?
Personal loans are a safer bet than a balance transfer card when it comes to credit card debt consolidation. Since they’re considered installment debt, personal loans feature low interest rates compared to credit cards, with terms lasting up to 60 months. Lenders may even offer loans with no fees.
Balance transfer credit cards have lower interest rates than traditional credit cards, and most offer an introductory 0% APR. However, these offers typically last between 12-18 months, after which your APR will be based on your creditworthiness and market conditions. Transfer fees of up to 5% of the transferred amount may apply as well.
Can I get a personal loan while unemployed?
While it’s not impossible to get a loan while unemployed, it will be difficult without a job offer or another source of income. Some lenders may still extend you a loan offer, but keep in mind that interest rates will likely be high, as you’ll pose a higher risk.
How We Chose the Best Personal Loans
Financial stability
We looked at the 2020 Largest 50 Institutions By Consolidated Banking Assets report by the Federal Deposit Insurance Corporation (FDIC). Also, we took into account the top unsecured personal loan companies from the growing fintech market.
Consumer satisfaction
We referenced J.D. Power’s 2020 U.S Consumer Lending Satisfaction Study to measure consumer satisfaction, favoring companies with the highest ratings. As an additional metric, we considered the number of complaints each had with the Consumer Financial Protection Bureau (CFPB).
Affordability
We wanted lenders that cater to both consumers with excellent credit and those who are just getting started or have less-than-stellar credit scores. We looked at each lender’s minimum credit requirements and noted those which included alternative credit data.
Finally, we checked the lenders’ APRs, selecting those with the lowest starting APRs.
Overall Lending Offer
We ranked the companies based on what they offer for: loan options, APR range, available terms, credit score requirements, fees, and prepayment fees.
We also looked at service or interest rate guarantees, funding times, fund disbursement options, ways to apply, state availability, discounts, and customer support.
Summary of Money’s Best Personal Loans of December 2021
LightStream – Best Variety of Loan Options
Credible – Best Marketplace
SoFi – Best Online Lender
Upstart – Best Peer-to-Peer Lender
PenFed – Best Credit Union
U.S. Bank – Best Bank
